This work addresses the simple and effective technique to simultaneously improve biodiesel synthesis and fuel quality. The co-solvent technology was applied to fulfill this purpose. Experiments were performed through the transesterification of palm oil and ethanol in a microtube reactor under the supercritical conditions. The isopropanol was added in the system and played the roles as a source of reactant to produce isopropyl esters and cosolvent to enhance the homogeneity of the mixture. Upon the application of iso-propanol, high yield of biodiesel was attained under the milder conditions than those reported in the literature in terms of reaction temperature, pressure, residence time, and ethanol-to-oil molar ratio. The influence of operating conditions on the %Ester was investigated and optimization of %Ester was carried out via response surface methodology. The improvement of biodiesel quality was achieved particularly the cloud and pour points which were better quality than that of the conventional biodiesel production.